Shares of Lucapa Diamond (ASX: LOM) experienced a nearly 5% increase on Monday after the Australian miner revealed a substantial rise in resources at its Lulo mine in Angola.
According to the company’s announcement, the volume of diamonds with a feasible chance of economic extraction at Lulo surged to 228,000 carats as of December 31, marking a notable increase from 153,870 carats recorded in the previous year. Lucapa emphasized that the newly identified resources have the potential to extend the deposit’s production by an additional eight years.
The updated figures stem from an independent asset evaluation conducted by South Africa’s Z Star Mineral Resource Consultants, as highlighted by Lucapa.
The evaluation valued the resources at $1,897 per carat, indicating a 5% decrease from $2,000 in December 2022, partly attributed to the decline in diamond prices observed last year. Although there was a slight decrease in diamond grades, registering at 4.55 carats per 10 cubic meters, Lucapa managed to recover 181,900 precious stones in 2023, reflecting a substantial 45% increase from the previous year. The average rough size per stone also saw a modest uptick from 1.23 carats in 2022 to 1.26 carats in 2023.
Lucapa highlighted that this surge signifies the sixth consecutive year of resource growth at Lulo. The total production from Lulo to date has reached 200,000 carats, generating sales totaling $426 million at an average price of $2,122 per carat.
Operational since 2015, the Lulo mine is renowned as the world’s highest dollar-per-carat alluvial diamonds operation.
Lucapa holds a 40% interest in the venture, with the remainder held by Angola’s national diamond company (Endiama) and Rosas & Petalas, a private entity.
Angola, ranked fifth globally in terms of diamond production by value and sixth by volume, has seen a transformation in its diamond industry over the past century. The sector, which commenced operations under Portuguese colonial rule, has progressively eased government regulations and restrictions to foster greater participation by private entities.
Lucapa’s shares closed at A$0.12 on Monday in Sydney, resulting in a market capitalization of A$33.25 million (approximately $22 million) for the diamond miner.
